Suppose two countries are identical in every way with the following exception. Economy A has a greater quantity of human capital than economy B. Given this information, we know with certainty that:
A) steady state output per worker in A is higher than in B.
B) steady state growth of output per worker is higher in A than in B.
C) steady state consumption in A and B are the same.
D) steady state output per worker in A is lower than in B.
E) steady state growth of output per worker is higher in B than in A.

Question

Quizplus · Accepted Answer

Human capital refers to the knowledge, skills, and talents that workers possess. A higher quantity of human capital in economy A would mean that its workers are more productive and efficient, resulting in higher output per worker. Therefore, steady state output per worker in A is higher than in B.

Suppose Two Countries Are Identical in Every Way with the Following